Antitrust row: MS to pay Gateway $150m

AGENCIESApr 13, 2005, 12.04am IST

SEATTLE: Software maker Microsoft Corp agreed to pay computer maker Gateway Inc $150 million over four years to settle a legal dispute, and Gateway said it will use the money to market and develop products that run Microsoft software.

As part of the settlement announced on Tuesday, Gateway will release all antitrust claims against Microsoft based on past conduct. Microsoft denies any wrongdoing.

To account for the settlement, Redmond-based Microsoft said it would take a $123 million pretax charge in the quarter ended March 31. The company also plans to take a pretax charge of $41 million for an earlier settlement with burst.com.

And it will take an additional $550 million charge to reserve funds for other antitrust matters, such as its ongoing legal wrangling with digital media rival Realnetworks Inc.

The deal marks the latest in a series of agreements Microsoft has reached to put various antitrust claims behind it.

"Obviously Microsoft wants to get as many legal barriers out of the way as possible," said Alan Davis, an analyst with Seattle-based Mcadams Wright Ragen. Davis said the Gateway settlement was "below the radar" compared with what Microsoft has done with bigger cases.